Every trading platform shows the same handful of account numbers: balance, equity, margin, free margin and margin level — and some add credit and leverage. They are easy to confuse, and the differences matter most at exactly the moment you are losing money. This page defines each one and walks through a single trade from open to stop-out.
The account fields, one by one
| Field | What it means |
|---|---|
| Balance | Deposits minus withdrawals plus the result of closed trades (including commission and swap already charged). It does not change while a position is open. |
| Equity | Balance + floating profit/loss of open positions (+ credit, if any). This is what the account would be worth if you closed everything now. |
| Margin (used margin) | The deposit set aside for open positions: position value ÷ leverage. It is not a fee and is released when the position closes. |
| Free margin | Equity − used margin. The amount available to open new positions or absorb further losses. |
| Margin level | Equity ÷ used margin × 100%. Shown as blank or "–" when no positions are open, because there is no used margin to divide by. |
| Credit | Money credited by the broker, typically a bonus. It can usually absorb losses in equity but cannot be withdrawn. Trading bonuses and similar incentives are restricted for retail CFD clients in the EU and UK. |
| Leverage | The account's maximum ratio of position value to margin, e.g. 30:1. It sets the margin requirement; it is not the amount of risk you take, which depends on position size and stop. |
"Balance $0.00, Margin $0.00, Free margin $0.00, Margin level –, Leverage 1000:1"
That is simply an empty account: nothing deposited, no positions, so no margin level can be calculated. The leverage figure is only the maximum the account allows. Leverage of 1000:1 is far above what EU, UK, Australian (30:1 on major pairs) or US (50:1) rules allow for retail clients, which usually means the account sits with an offshore entity — check who regulates it before depositing (see choosing a broker).
Worked example: one trade from open to stop-out
Account in USD, balance $10,000, leverage 30:1. Buy 1 lot (100,000 EUR) of EUR/USD at 1.1000.
Used margin = $110,000 ÷ 30 = $3,666.67
Pip value = $10 per pip
| Price | Floating P/L | Equity | Free margin | Margin level |
|---|---|---|---|---|
| 1.1000 (just opened) | $0 | $10,000.00 | $6,333.33 | 272.7% |
| 1.0950 (−50 pips) | −$500 | $9,500.00 | $5,833.33 | 259.1% |
| 1.0800 (−200 pips) | −$2,000 | $8,000.00 | $4,333.33 | 218.2% |
| ≈1.0367 (−633 pips) | −$6,333 | $3,666.67 | $0.00 | 100% — margin call warning |
| ≈1.0183 (−817 pips) | −$8,167 | $1,833.33 | −$1,833.33 | 50% — stop-out |
(For simplicity the margin is kept fixed at the opening value; some brokers recalculate it as the price moves, which shifts these thresholds slightly.)
Notice what the table shows: the margin call arrives only after a 63% loss of the account. Margin rules are a last-resort safety net for the broker, not a risk-management tool for you. A stop-loss and a sensible position size should end a losing trade long before margin becomes the issue.
Margin call vs stop-out
- Margin call level — the broker's warning threshold (often 100%, but it varies). You can usually no longer open new positions.
- Stop-out level — the level at which the broker starts closing positions, normally the one with the largest loss first. For retail CFD clients in the EU and UK the margin close-out rule is set at 50% of the initial margin required, applied per account.
- Negative balance protection — EU and UK retail CFD clients cannot lose more than the money in their CFD account. Outside those rules, a fast gap can leave a negative balance that you owe the broker.
Effective leverage: the number that actually matters
In the example the account controls $110,000 with $10,000 of equity, an effective leverage of 11:1 — even though the account's maximum is 30:1. A 1% move in EUR/USD (110 pips) changes equity by about 11%. Keeping effective leverage low is what keeps margin level high.
Run your own numbers with the margin calculator, which shows free margin, margin level and the pip distance to margin call and stop-out. For the bigger picture read margin and leverage.
Risk warning
Leveraged forex and CFD trading can lose you money quickly, and losses can exceed what you planned when prices gap. EU regulators found that 74–89% of retail CFD accounts lose money. This page is general education, not advice.
Last reviewed: October 4, 2026